The Commerce, Walled Lake, and Wixom Trailway Management Council is facing a slight hitch in its renewed effort to acquire and develop a railway corridor to as a trailway for lakes area communities.
The U.S. Surface Transportation Board (STB) recently denied Michigan Air-Line Railway’s petition for an abandonment exemption.
The Michigan Air-Line Railway property spans from West Bloomfield Township to the western city limits of Wixom and is considered the missing link in a non-motorized trail that traverses the county and connects to a cross-state corridor spanning the Lower Peninsula.
The 5.45-mile rail line is still in use by American Plastic Toys, a business located in Walled Lake. The company is the lone shipper on the line.
STB board members denied Michigan Air-Line Railway’s petition because it didn’t “provide the Board with sufficient evidence regarding the revenues and costs associated with the line, thereby making it impossible to determine what burden, if any, (Michigan Air-Line) Railway incurs in continuing to operate the line.”
According to the STB, railway common carriers are required by law to get authority from the STB to abandon railroad lines, which can be a long, involved process. However, exemptions from the full abandonment process can be granted, which is what Michigan Air-Line Railway was hoping to get approved.
In order to be granted the exemption, the STB reviews the entire cost to operate the line and the revenues generated. If the line is shown to be unprofitable and looks as if it will continue to be unprofitable, then the STB usually allows for abandonment.
However, in its decision, the STB argued that it didn’t have enough information provided by Michigan Air-Line Railway to determine if the line met the financial requirements to receive an exemption.
The STB also stated in its decision that the unclear relationship between Michigan Air-Line Railway and Rail Freight Solutions also needs clarification before granting the abandonment exemption.
While Michigan Air-Line Railway owns the railroad, Rail Freight Solutions actually operates the locomotive — not an entirely unusual arrangement.
However, Rail Freight Solutions needs to get the STB’s authority to operate the line — which, according to the STB decision, never happened. Therefore, Rail Freight Solutions never really had the authority to operate the line.
The STB gave the two parties until Tuesday, June 7 to submit a contract between them and any other documentation showing their relationship.
Nevertheless, Michigan Air-Line Railway still hopes to get the STB’s approval to abandon the railroad, therefore allowing the trail project to move forward.
“We are at liberty to refile a new petition for exemption, and we plan to do that so we can address the issues as indicated,” said Robert Alderson, an attorney for Michigan Air-Line Railway.
He added that the company still wants to abandon the rail line.
“We still want to because we lose money serving the only shipper on the line (American Plastic Toys), so the better use of the line is to abandon it and convey the right-of-way to the local units of government who can get funding from various state agencies to fund the redevelopment and use of the trail. It’s a better use of the line,” he said.
Meanwhile, the Trailway Management Council plans to go ahead with preparing its grant application for funding from the Michigan Natural Resources Trust Fund (NRTF).
“We’re still moving forward with the grant applications,” said Commerce Township Planner Kathleen Jackson. “The NRTF board doesn’t make the grant decision until December, and (Michigan Air-Line Railway) hopes to have an answer by then.”